Commonwealth Bank (ASX:CBA) recorded cash net profit after tax of $2.2 billion for the September quarter, up 20 per cent on the same period last year but weaker compared to the more recent quarters.
The $2.2 billion profit was 9 per cent lower than the quarterly average for the six months to June 2021, a period that benefited from sharply lower bad debt provisions.
The bank’s income was down 1 per cent, or flat excluding the divestment of Aussie Home Loans, with above system volume growth helping to offset continued margin pressures and lower non-interest income.
Commonwealth’s expenses also fell 1 per cent, with lower remediation costs offsetting higher staff expenses. The bank reported a loan impairment expense of $103 million in the quarter.
The bank’s net interest margin was “considerably lower” in the quarter. Drivers of the decline were consistent with those indicated at the group’s FY21 results in August, including higher liquid asset balances, home loan price competition and switching to lower margin fixed rate loans, as well as the continued impact of a low interest rate environment.
According to CBA, credit provisions were broadly unchanged, continuing to reflect sound portfolio credit quality and a cautious approach to provisioning as the Australian economy recovers from the impact of Covid-19 restrictions.
“Through the first quarter of FY22, our focus has remained on supporting our people, customers and communities as the economy recovers from the impact of COVID-19,” said CEO Matt Comyn.
“Our focus on operational execution ensures we are well placed to provide this support as activity restrictions continue to ease. This was reflected in strong, above-system volume growth in core markets in 1Q22, continued sound portfolio credit quality and balance sheet strength.”
Shares in Commonwealth Bank (ASX:CBA) are trading 6.1 per cent lower at $101.07.